On Tuesday, Brent crude rose 1.75% to $106.60 per barrel, while West Texas Intermediate increased by 1.7% to $98.10. This uptick came after a significant drop of over 7% on Monday, triggered by signals from U.S. and Iranian leaders indicating a willingness to pursue diplomatic solutions to the ongoing conflict.
The U.S. has reportedly conducted limited strikes against Iran, maintaining a low-profile military campaign to avoid escalating tensions further. Despite these military actions, U.S. officials, including Vice President JD Vance and Secretary of State Marco Rubio, have expressed optimism about reaching a negotiated settlement.
The rise in oil prices is particularly concerning as it contributes to inflation and high gasoline costs in the U.S., issues that are critical for the Trump administration ahead of the midterm elections. Additionally, comments from Federal Reserve presidents suggest that interest rates may need to increase to combat inflation, which could impact economic growth and consumer spending